Rent cut by £8.2k after arbitration
An Enterprise Inns tenant has had her rent reduced by £8,200 after taking the pubco to arbitration — but the pubco has claimed both sides could have saved money by using the BII's Pubs Independent Rent Review Scheme (PIRRS).
Priti Biswas had been at the Fox & Duck in Richmond, Surrey, since 2006, with her business partner and daughter's fiancée Colin Verrall, when the rent came up for review in September 2009.
The passing rent was £31,000 and Enterprise had wanted to increase the rent to £40,000 despite Biswas asking for a reduction following a slump caused by the recession. The pubco later reduced this to £36,000.
While sales in their second year at the pub rose by £40,000, they fell by £20,000 in 2008 and continued to slide. The turnover last year was just over £160,000. "We tried everything from live music to comedy nights all with free entry," said Biswas's daughter Louisa. "But nothing worked. There are 24 pubs within a mile and half."
The arbitrator agreed to reduce the rent to £22,800, which will be backdated to September 2009. "We are pleased with the result, but the process took too long," said Louisa Biswas. "If the rent had gone up to £40,000 we would have had to take £400,000."
David Morgan of Cookseys DMP, who acted on behalf of the tenants, said: "Had the tenants accepted that rent it would have bankrupted them." Costs for the arbitration have yet to be awarded.
PIRRS could have saved money
Enterprise said: "We judged that significant trading opportunities were being missed by the operators. The lessees chose to start the PIRRS process, but then withdrew and went to arbitration instead under advice from their valuer David Morgan. Before any fees were incurred, we offered to settle the rent by agreement to avoid the large costs associated with arbitration.
"Under PIRRS, this dispute could have been settled at a cost of £2,000 each, but we think it will prove to have cost well over £20,000 in fees.
"While we are disappointed with the outcome, as with all such determinations we accept the decision and will now work with our retailers to improve the performance of the pub."
Have you had success with an arbitration. Contact Send Yrfyrl.sbbggvg@jeoz.pbz an email.
